Until the 2007 credit crunch, it is probably fair to say that very few people outside the City would have heard of Libor, or frankly cared.

But since those dark days in the autumn of four years ago, the London Inter-Bank Offered Rate has become one of the indicators that are used to gauge the level of panic in the markets, as it is the rate at which banks are prepared to lend money to each other.

If banks are worried about lending to each other, they are likely to be worried about lending to businesses and individuals too.

As the chart below shows, the fix, as it is known, on Wednesday of 0.99% is the highest Libor has been since July 2009 and continues a steady upward path that the rate has been following since the eurozone crisis erupted in August.

Graph: base rate versus Libor

What it does it mean? Essentially, that the big banks that are involved in setting Libor are charging each other almost twice as much as the Bank of England's base rate of 0.5% to borrow money for three months. This gap - of almost 50 basis points - is considerably more than the pre-crisis days when the gap would have been expected to be little more than 10 basis points. In fact, in September 2009 there was even a period when it fell to barely 5 basis points.

The higher the gap between the Bank of England's rate and Libor, the more there is alarm among the banks about whether they should be lending to each other. Despite the widening in the spread between the two rates since the summer, the market has not got itself into the state of panic that it was in during October 2008 when the difference between the two reached more than 1.7 percentage points, or 170 basis points.

Even so, the rise in the level of Libor is a potentially worryingly signal. While this analysis has concerned the price of lending in sterling, the price at which banks are willing to lend to each other in dollars is also rising. Today it rose for the 34th consecutive day - the longest upward path for six years.